AI is very beneficial to small businesses in the following aspects: customer satisfaction, potential cost savings, increases in efficiency, and future business opportunities. These are applications that would enable a small business owner to analyze data in a bid to plan properly or to carry out the various procedures in a business more efficiently. Others can improve consumer communication. Even better, some of these programs are free, such as Google Docs and ChatGPT.
The Small Business and Entrepreneurship Council’s 2023 Small Business AI Adoption Survey found that 83% of small business owners plan to use them within the next year. Most importantly, it will help small firms in the areas of marketing, customer relations, bookkeeping and accounting, security, and employee relations. Select suitable tools for performing tasks, provide instructions to the personnel on how to use the tools, and identify improvement sectors in the AI improvement process. Don’t ignore the necessity of gathering the data that AI is offering and implementing its advantages in your company. The Oxford Training Center is renowned for its accessibility to students from a variety of backgrounds, academic rigor, and practical usefulness. Flexible formats are available for the Future of Work with AI course to accommodate a variety of learning preferences.
What is AI?
AI can be defined as the simulation by a computer of human cognitive phenomena to analyze and solve different kinds of problems. These applications of artificial intelligence include machine vision, speech and voice recognition, natural language processing, and knowledge-based systems or expert systems.
As you are aware, there has been a lot of noise made around artificial intelligence in recent years, and to try and jump onto this moving train, many vendors have gone out of their way to demonstrate how AI is already part of their portfolio. The thing they describe as “AI” may be a popular technology, such as machine learning.
AI to develop machine learning models needs certain types of software tools and hardware tools available in the market. Some of the programming languages that are widely used by AI developers can be mentioned, and these include Python, R, Java, C++ and others, like Julia. However, none of them is exclusively employed in AI.
What is the impact of AI on small businesses?
Artificial intelligence is completely changing small enterprises. AI solutions, which were previously only available to IT giants, are now widely available and reasonably priced, assisting small business owners in automating processes, making more informed decisions, and providing incredibly customized client experiences. This trend is quickening in 2025; according to recent research, 40% of small enterprises currently employ generative AI, which is almost twice as many as two years ago.
Benefits of using AI tools for small businesses
Utilizing specific AI tools in their activity is helpful for small firms in several aspects.
- Thus, the application of AI can increase working efficiency by reducing the amount of time workers spend on monotonous tasks.
- A discovery made regarding the truth of the data by an AI entails alerting the user on issues of risk or errors, such as the payment of similar amounts to the wrong payee, reducing risk and cost.
- In cases where customers make numerous calls and inquiries, therefore reducing the actual quality of calls and interactions to more complex issues, a business may be handling it fine to let AI chat and customer interactions take over some of the workload.
- They also increase the number of hours your company may provide client care. AI can help with content personalization so that consumers have a distinctive experience with the brand.
- Machine learning algorithms, which are incorporated into many AI applications, can provide a deeper comprehension of consumer behavior through pattern recognition that becomes better with time.
Applications of AI in small businesses
The needs of the small firm and its daily operations will determine which of the many artificial intelligence tools available is best. Here is a summary of some of the commercial domains and applications that artificial intelligence (AI) tools can facilitate.
1. Accounting
By providing recommendations for transaction classification based on previous data, accounting AI can improve the efficiency of accounting procedures. Data analysis for cash flow forecasting, accounts payable, and accounts receivable processes can be aided by some AI tools. Even mistakes or anomalies in transaction data that point to potential fraud or security threats can be detected by them.
2. Chatbots
A chatbot is an application that uses voice or text interactions to mimic human conversation. It can answer frequently asked questions and requests from clients when included in a business website. This increases customer support coverage to 24 hours and frees up the crew to handle more complicated situations. Numerous chatbots may be integrated with customer relationship management (CRM) software to incorporate data on client interactions, and they can also learn as they gather data.
3. Customer service automation
One method of automating customer assistance is using chatbots. While technologies like voice search might be useful for guiding customer calls, many phone systems use voice-enabled AI to answer inquiries and route calls. Similar to chatbots, these kinds of tools can increase customer service center hours without requiring the hiring of round-the-clock assistance.
4. Cybersecurity
Small business owners can utilize AI-powered cybersecurity technologies to monitor for data anomalies or patterns of strange activity and receive alarm alerts if they want to protect their company and consumer data.
5. Marketing and advertising
Several current generative AI technologies, such as ChatGPT, Midjourney, and Adobe Firefly, can help with content generation for various marketing and advertising purposes, and other brief and caption writing, blog posts, emails, and graphic content. Grammarly is one tool that can be used to examine or edit content. Content can be scheduled, posted, or sent using other AI tools, and campaign, test, or post-performance can be monitored based on predetermined metrics.
6. Recruiting
AI-powered tools can help recruiters by reducing the time-consuming effort of reviewing applicants. AI-powered solutions can reduce the number of candidates by screening applications and resumes.
What challenges does one face during the use of an AI tool?
When implementing AI solutions, small firms encounter a number of important obstacles that may prevent effective integration and use.
1. Budgetary restrictions and a lack of resources
Small businesses, especially the sole traders, are not able to afford AI technologies given their limited capital or budgets available; this is according to 36% of the respondents who indicated that it was difficult to implement the many changes in AI and 31% of the respondents said that the cost is a major factor. While big business corporations have the human and financial capital that can enable them to implement and manage AI systems, small organizations usually have neither.
2. Technical complexity and integration
According to 72% of AI-using organizations, integrating AI with current business processes is a regular challenge. This problem is made worse for small enterprises by a lack of IT infrastructure and knowledge.
3. Data security and privacy issues
Seventy percent of firms that use AI are concerned about data protection and compliance with legislation such as GDPR. Due to a lack of resources and expertise to guarantee strong data protection, small firms frequently struggle to safely handle consumer data when utilizing AI.
4. Absence of training and experience
Since many small organizations lack internal AI experience, it might be difficult to effectively train employees and apply AI solutions. According to 44% of owners and senior management, training and onboarding provide significant obstacles. Businesses run the danger of underusing AI or running into operational issues if they lack sufficient understanding.
5. Challenge measuring ROI
Because they frequently find it difficult to calculate the return on investment (ROI) from AI, mid-sized and small enterprises are reluctant to make large budgetary commitments. Although many still find it difficult, proving AI’s worth is essential for long-term investment.
6. Diverse views in different roles
The way that various roles in small firms view AI challenges varies. Individual contributors are less concerned with data privacy than executives, who are more likely to be concerned (71%). For AI adoption to go more smoothly, these many issues must be addressed.
Future trends of AI for small businesses
AI tool developments have a wide range of exciting uses for small businesses. For example, using previous data to further customize client experiences might provide small firms with a competitive advantage. The capabilities and accuracy of generative AI tools will increase as natural language processing models continue to develop. To adapt this technology for further industries and specialized applications, tools are being created. Predictive analytics can also be made possible by AI systems, giving decision-makers insightful information based on both historical and present data. In applications like inventory management and financial forecasting, this can be especially effective.